Argentina Moves to Acquire New Submarines Amidst Financial Hurdles
SANTIAGO, Chile — The Argentine government is advancing in its quest to strengthen its naval capabilities, with plans to acquire three Scorpene submarines from France’s Naval Group in a deal anticipated to reach $2 billion. Sources from Buenos Aires indicate that a Letter of Intention (LoI) was expected to be finalized by mid-October, although negotiations surrounding financial terms are taking longer than anticipated.
The urgency for the acquisition stems from the dire state of the Argentine Navy’s submarine fleet, which currently has no operational vessels. The ARA San Juan, one of two TR-1700 type submarines constructed in Germany during the 1980s, was tragically lost in the South Atlantic in November 2017. Additionally, upgrades to its sister ship, ARA Santa Cruz, initiated in 2016, have been stalled since 2020, effectively rendering the project abandoned. The ARA Salta, an aging Type 209 submarine, remains in service but is restricted to basic training maneuvers due to its inability to dive. In light of these limitations, Argentine naval crews are seeking practical experience with the Peruvian Navy.
Despite France’s willingness to offer favorable credit terms for the new submarines, Argentina faces challenges in securing necessary loan guarantees, a situation complicated by the nation’s complicated financial history. Vicente García, a security and defense analyst based in Montevideo, asserts that while new submarines are essential for the Argentine Navy, cost management is crucial, considering that other military branches also require modernization.
García suggests that purchasing pre-owned vessels might be a more prudent option under the current economic constraints. With President Javier Milei’s administration implementing administrative cuts and reducing social services to improve fiscal liquidity, the nation remains in a precarious situation. He warns that high country risk assessments, coupled with a poverty rate affecting up to 57% of the population, could lead to social instability and further economic decline.
Argentina has, however, moved forward with recent acquisitions, including second-hand F-16 fighter jets from Denmark and P-3C maritime patrol aircraft from Norway for its Air Force and Navy, respectively. The current procurement agenda also encompasses new frigates, armored vehicles for the Army, helicopters across all services, and a modern standard assault rifle.
As Argentina navigates this intricate procurement landscape, the future of its naval capabilities hangs in the balance.
